MT. VERNON, Ind. — CountryMark Refining and Logistics, LLC, has agreed to spend $18 million on new pollution controls to settle a civil suit brought by the U.S. Environmental Protection Agency (EPA) and the Department of Justice, as well as the Indiana Department of Environmental Management (IDEM).

CountryMark also agreed to pay a $167,000 civil penalty and perform environmental projects totaling more than $180,000 to resolve alleged Clean Air Act (CAA) violations at its refinery in Mt. Vernon. The out-of-court settlement resolves all past environmental issues and absolves CountryMark of any additional penalties from 1970 – when the CAA was passed – to the present, said Pat Ward, vice president of operations at CountryMark.

Negotiations have taken four years, Ward said.

According to the EPA, the new pollution controls required by the settlement will reduce emissions of harmful air pollution that can cause respiratory problems, such as asthma, and can contribute to acid rain, smog and haze, by an estimated 1,000 tons per year.

The complaint alleged the company made modifications to its refinery that increased emissions without first obtaining pre-construction permits and installing required pollution control equipment. The CAA requires permits before making changes that would result in greater air pollution.

“They allege that we did these things. Country-Mark denies that we did these things. There was never any proof of any violation,” Ward stated.

EPA responded: “Violations under civil judicial enforcement settlements, like this settlement with CountryMark, are only ‘alleged’ because the merits of those claimed violations have not been decided by a court of law.”

EPA went on to state the defendant has the choice of whether to proceed with a trial or to reach a mutually agreed-upon settlement with the government, called a consent decree. CountryMark chose the latter. In a consent decree, the court must approve the settlement, which is then judicially enforceable. While the defendant is required to meet the terms of the consent decree, they do not have to acknowledge they violated the law.

Despite CountryMark’s denial of wrongdoing, Ward said the company agreed to the settlement because of the potential for greater penalties, should a judge side with the plaintiffs. “They threatened to fine us per day for infractions. We’re talking about 30 to 40 years ago (when CAA was passed),” Ward explained. The question seems to center on whether CountryMark made a significant change in its equipment without a permit. CountryMark maintains all updates and improvements were made with the proper permits, Ward said.

In addition to new and upgraded pollution controls and greater emission limits, the settlement requires new controls on the refinery’s flaring devices, used to burn off waste gases.

According to EPA’s records, since March 2000, the agency has entered into 32 settlements with U.S. companies – CountryMark being the latest – that represent more than 90 percent of the nation’s petroleum refining capacity.

“Negotiations are continuing with other refiners representing an additional 5 percent of domestic refining capacity, and investigations are under way on others,” EPA said in a statement.

EPA said these settlements cover 109 refineries in 32 states and territories and upon implementation, will result in annual emission reductions of more than 93,000 tons of nitrogen oxides and 256,000 tons of sulfur dioxide.

This effort by the EPA is part of a national enforcement initiative to improve compliance among petroleum refiners and to reduce air pollution. Refiners in total have agreed to invest more than $6 billion in new pollution controls. “Individual companies determine how they will meet their obligations under the law,” EPA stated. “EPA takes enforcement action only if violations of the law are found. EPA is not involved in business decisions about how a company will implement new regulations or choose to address violations to meet the terms of a consent decree.”

CountryMark will continue to do business as usual, with no change in the cost of its products or employee layoffs, Ward said. “This does affect the cost of doing business and the profitability of our plant … (but) we run an efficient operation, and we can manage. This does not change the long-term viability of the company,” Ward said.

CountryMark is Indiana’s only American-owned oil exploration, production, refining and marketing company, and is one of only three farmer-owned cooperative refineries in the country. The refinery has the capacity to refine 27,100 barrels of oil per day into premium gasoline and diesel fuel. The company is a leader in the distribution of biodiesel and ethanol-blended fuels.

“I have a great deal of faith that CountryMark will continue to find unique and innovative solutions to reduce our environmental footprint, while continuing to fulfill our mission of providing our customers with American-made fuels 24 hours a day, 365 days a year,” said CountryMark CEO and President Charlie Smith, in a press release.

The requirements of the settlement will bring CountryMark’s equipment up to current standards under the CAA. In addition, the state of Indiana has received $110,000 to remove asbestos from an old grain elevator in downtown Mt. Vernon. The settlement also requires CountryMark to provide at least $70,000 to retrofit public buses with idle reduction technology.